Auto insurance fraud: How to protect yourself

What is auto insurance fraud?

Basically, it means making a fraudulent insurance claim for payment. Examples range from slightly exaggerating a claim and falsifying injuries to deliberately causing an accident or damaging a vehicle.

There are 3 main types of insurance fraud:

• Organized fraud: Fraudsters work together to stage collisions and then submit exaggerated injury or damage claims to multiple insurers to avoid detection. This type of fraud is best combated by insurance companies working in cooperation with law enforcement and the government.
• Premeditated fraud: A person purposely makes a false insurance claim for things like vehicle damage that wasn’t caused by an accident or medical treatment that wasn’t provided. Sometimes, the fraud also involves a body shop or rehab service provider.
• Opportunistic fraud: A person inflates a legitimate claim, for example by overstating the damage, claiming for damage that happened before the accident, or making a claim for property that wasn’t actually stolen.

How to avoid being scammed after an accident

If you’re involved in a collision:

• If anyone is injured, call 911.
• Take photos of the scene and the damage to your vehicle.
• Write down information about the other driver and vehicle involved, such as license plate number, car make and model, driver’s name and insurance information. Note any odd behaviour.
• Don’t argue with other drivers. If things get heated, talk only to the police and your insurer.
• Notify your insurer right away and describe what happened.

Avoid tow truck fraud:

• Don’t just go with the first tow truck at the scene. The driver may be getting a fee to bring vehicles to a body shop.
• Instead, use a tow truck service approved by your insurance company.
• Be sure the tow truck has a municipal licensing number.
• Carefully read anything the tow truck driver asks you to sign.
• Insist that your vehicle be towed to a body shop or other location that you’ve chosen.

Recognize auto repair fraud:

• Be aware that there are dishonest repair shops that will purposely damage your vehicle or inflate the numbers to boost the repair bill.
• Use body shops recommended by your insurer.
• Get a written estimate from the body shop before going ahead with repairs.

If you’re injured:

• See only trusted medical and legal professionals. Check their credentials through licensing regulators.
• Read your policy to understand the extent of your medical coverage and know what your settlement includes.
• Keep detailed records of your medical appointments and services received and compare your records against the statements you receive.
• Never sign a blank insurance claim form.

You can avoid becoming a target of auto insurance fraud by watching for red flags and knowing how to respond. The Personal combats auto insurance fraud in cooperation with customers, law enforcement, government and the Insurance Bureau of Canada (IBC).

If you think you’ve been a victim of an insurance crime, contact the Canadian Crime Stoppers Association (1-800-222-8477) or the IBC (1-877-IBC-TIPS or fill out their anonymous tip information form).

For more on this topic, visit:

How to avoid insurance fraud

Government of Canada: Insurance fraud

Insurance crime

Auto insurance costs Canadians billions

Collision protocol 101

How to handle a hit-and-run